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this post was submitted on 21 Jul 2023
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Asklemmy
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This is a really good point, and I’m glad that someone who’s got a decent understanding of basic economics is replying to me.
The 95% profit margin was definitely to make a point, as you pointed out. And as you said, according to conventional thinking on capitalism, market forces should push that down to a fair equilibrium.
I think that the issue I was hinting at is that there is a fair amount of contemporary thinking that provides pretty convincing arguments that the nature of capitalism necessarily tends towards consolidation and monopoly over time. The classical model of a baker charging too much on an island, so someone else opens a bakery, doesn’t really work too well when we’re talking about telecom companies and media conglomerates. Once a high-tech segment has consolidated enough, it becomes impossible for anyone other than large companies to enter the market. And when those large companies are actually owned by a larger parent company, we start to see the failures of the classical market forces to produce a ‘fair’ equilibrium due to monopolization.
We definitely aren’t at the point of total failure yet, but in my opinion the trend line isn’t hard to spot. And I think the bigger issue is that due to regulatory capture, there’s not much we can do to patch the sinking ship.